Sterling gains against Canadian Dollar as positive Brexit news continues

The Pound is continuing its good run of form this morning against most major currencies following a positive week last week.

Investors and speculators were keen to buy back into Sterling as a number of reasonably positive pieces of news surrounding Brexit deal progress hit the news. This led to a higher demand for the Pound and therefore it gained value.

It appears that people now do not believe that a no deal Brexit is of a high possibility. This had been one of the key factors that had been weakening the Pound and holding it back due to the negative impact this could have on the UK economy.

In my opinion I do see the Pound having another good week, in previous months when Sterling exchange rates have had a short run of strength we have then tended to find something comes out to knock it straight back down again, however on this occasion it does seem like Theresa May is making progress and getting more backing for her Brexit deal.

Even if she does not get her deal approved it also seems that the other options on the table, for example an extension to article 50 also appear to be seen as Sterling positive and many analysts feel that the Pound is undervalued in its current state so there is further for it to gain with even the smallest piece of positive news.

Pound vs Canadian dollar: Economic data this week

We have a number of members of the Bank of England and Bank of Canada speaking this week in what is a fairly quiet week of economic data for both the UK and Canada, until we hit the end of the trading week.

Brexit news in my opinion will be the main driver for GBP/CAD exchange rates. If you are in the position to buy or sell Canadian Dollars with the Pound in the near future then it is key to keep a keen eye on any progress on this front.

Friday appears to be the main day for economic data for the UK and Canada, with Industrial production data out for the UK on Friday morning and over the course of the day the NIESR (National Institute for Economic and Social Research) growth estimate for the UK also being released over the course of the day.

Canadian unemployment figures are out at 13:30pm and there is a current expectation that unemployment may have improved from 5.8% to 5.7% which could give the Canadian Dollar a good finish to the trading week.

Either way as mentioned earlier in the report Brexit news over the week is likely to be the most important driver so this will be the most important data to look out for.

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